PARIS: The French government is to loan €3 billion ($3.9bn; £2.6bn) apiece to ailing auto manufacturers Peugeot–Citroen and Renault, with the funds promised as long as the three companies do not close any of their operations in the country.
According to the terms of the deal, the loans will have a lifespan of five years, and an interest rate of 6%, with Peugeot–Citroen's joint financial services arm also receiving a loan of €2bn.
Renault Trucks, which is owned by Swedish auto maker Volvo, will be given a further €500m in loans, while suppliers to the auto industry will receive some €600m in state funding.
The auto industry employs around 10% of the French workforce, and the country's president, Nicolas Sarkozy, said the loans would allow the auto makers to "prepare calmly for the future".
The European Commission, however, plans to investigate the arrangements of the bailout to ensure they met European Union rules relating to competition and trade.
Says commission competition spokesman Jonathan Todd: "The commission will need to scrutinise very carefully details of the subsidies, the conditions attached, to make sure of their compliance with state aid and single market rules."
Data sourced from bbc.co.uk; additional content by WARC staff